Launch of new flats marks record supply

Thread Rating:
  • 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5
#1
Property investors will probably point out - it doesn't matter! Prices will keep rising and rising anyway....... Big Grin

The Straits Times
www.straitstimes.com
Published on Nov 22, 2012
Launch of new flats marks record supply

New projects raise supply this year to 27,084; HDB underlines affordability

By daryl chin

THE Housing Board has launched almost 6,500 new Build-To- Order (BTO) flats in five towns, making this another record year in terms of public housing supply.

The offerings announced yesterday are in three mature estates - Ghim Moh, Toa Payoh and Bedok - and the two newer estates of Choa Chu Kang and Sengkang.

With the rollout of 6,463 new units, the total number of BTO flats made available this year will reach 27,084 - the highest since the system was introduced in 2002.

Together with another 7,153 unsold "balance flats" that were relaunched for sale, this year's total supply comes to 34,237 flats.

Prices for a three-room flat start from as low as $146,000 - excluding housing grants - in Choa Chu Kang.

Yesterday, the HDB highlighted the affordability of these and other flats on offer.

It said that a typical applicant, who has a monthly household income of $4,000 and qualifies for a $15,000 housing grant, will need pay just $11 in monthly cash instalment for a $275,000 four-room flat at Keat Hong Mirage in Choa Chu Kang - after deductions from the Central Provident Fund.

National Development Minister Khaw Boon Wan said in Parliament last week that new flats - the bulk of which are reserved for first-time applicants - were still affordable for them.

He noted that the prices for new HDB flats had risen by 12 per cent, compared to the 34 per cent rise in the HDB resale price index since 2009.

Buyers will have to pay more, however, for flats in mature estates, with the cost of a four- room flat in Ghim Moh ranging from $450,000 to $594,000. A five-room unit in Bedok costs between $471,000 and $537,000.

Still, property analysts said the latest prices in this launch showed the HDB's consistency in keeping prices relatively stable. ERA Realty key executive officer Eugene Lim said the new flats are priced at a considerable discount, given the upbeat property market which has seen some resale units fetching up to a million dollars.

He said a resale four-room flat in Ghim Moh, which is about a decade old, can fetch $600,000 to $670,000 now.

"Although buyers have to wait about three years for their flats to be completed, they will get a brand new flat and skip paying a cash premium, which has to be paid upfront," he said.

Data collated from various agencies showed that these premiums - known as cash-over-valuation or COV - have now climbed to a median of $33,000 nationwide, up from $30,000 in the third quarter of this year.

PropNex chief executive Mohamed Ismail said, however, that buyers should also spend within their means.

"HDB prices are affordable only if one decides to pick up a unit in outlying estates. The message is this: HDB does provide affordable homes if one is realistic in the choice of location," he said.

Dennis Wee Group spokesman Lee Sze Teck said the ramped-up flat supply will divert some attention from the red-hot resale market which has achieved record highs this year.

"Prices will be further moderated in the coming years, given the number of flats that are expected to hit the market," he said.

The HDB launched 25,000 BTO flats last year, and plans to offer at least 20,000 more next year. Applications close next Tuesday.

darylc@sph.com.sg
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
Reply
#2
Interestingly, the jump from a 3 room flat to a 4 room flat is almost 100k. It seems quite substantial when some of these 3 rooms are priced around 150-200k
Reply
#3
(22-11-2012, 07:21 AM)Musicwhiz Wrote: It said that a typical applicant, who has a monthly household income of $4,000 and qualifies for a $15,000 housing grant, will need pay just $11 in monthly cash instalment for a $275,000 four-room flat at Keat Hong Mirage in Choa Chu Kang - after deductions from the Central Provident Fund.
darylc@sph.com.sg
I remember when i bought my 5 room flat my household income is ~S$5,500 i do not need to fork out any cash. All loan interest are paid from our CPF. And my 5 rm flat cost only S$198k.
I think as long as one needs to fork out cash for the loan interest, it is no longer or becoming less affordable. The govt can play around with HDB flats lease, flat size, loan tenure to make housing cheaper and continue to say its affordable. Pay $50 per month they can also say is affordable.
Reply
#4
Last time got huan gohment man say "loan amount matters, length doesn't matter", hence affordable.
Reply
#5
CPI do not properly reflect increase in property price which is a major expense. period.

Just my Diary
corylogics.blogspot.com/


Reply
#6
(23-11-2012, 04:59 AM)corydorus Wrote: CPI do not properly reflect increase in property price which is a major expense. period.

Housing is included in the CPI formula. Not sure what is lacking?
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
Reply
#7
(23-11-2012, 04:59 AM)corydorus Wrote: CPI do not properly reflect increase in property price which is a major expense. period.

i think it comes in the form of rental expense as a close proxy to property price
Reply
#8
Is one thing to include in CPI. But the weightage is not reflective as housing is a major expense.

Just my Diary
corylogics.blogspot.com/


Reply
#9
http://www.singstat.gov.sg/news/news/cpiaug2012.pdf

This shows the weightage of housing in the CPI, seems quite significant
Reply
#10
Thanks for the singstat pdf link.

There is a footnote in the pdf that says "... imputed rentals on owner-occupied accommodation (OOA) have no impact on the cash expenditure of most households in Singapore as they already own their homes. ..."

But imputed rentals affect annual value of property owners which is used for property tax computation. The AV of my flat increases about 70% from 2002 to 2012 and the property tax increases more than 22% (a lower % increase due to GST rebate in 2002). There is a need to change the authority's idea that "imputed rentals on OOA have no impact on the cash expenditure of most households"
Reply


Forum Jump:


Users browsing this thread: 1 Guest(s)